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Energy Market Commentary: OPEC and other Major Producers Extend Output Curbs .

Daily energy market commentary provided by Nasdaq Corporate Solutions Advisory Services' Energy Team.

Energy Market Commentary: OPEC and other Major Producers Extend Output Curbs

Friday, December 1, 2017

Sector Commentary

Energy stocks are expected to open flat to slightly higher, buoyed by higher crude oil prices, which are counteracting the modestly negative influence from broader equity futures after the Senate again delayed the vote on the tax bill.

WTI crude oil futures were higher by almost 1% in early trading following an agreement by OPEC and other major producers to extend output curbs until the end of 2018 to try to reduce the global oil glut. OPEC and some non-OPEC producers led by Russia agreed on Thursday to keep current limits on output in place until the end of next year, although they signaled a possible early exit from the deal should the market overheat and prices rise too far.

Natural gas futures were rebounding after yesterday's drop following a bearish inventory report.

U.S. INTEGRATEDS

(Late Thursday) Reuters - Chevron will focus on studying the geology of its block in Mexico's deepwater Gulf during the first four-year phase of its contract, rather than drilling new wells, a senior executive said.

Reuters - Exxon Mobil shut down a vacuum distillation unit at its 175,000 barrels per day Augusta oil refinery in Sicily following a fire, a company spokeswoman said. The fire was caused by a small leak from a valve and was extinguished within a few minutes. The VDU was safely shut down and the other units at the refinery are in operation, spokeswoman Isabella Bassi said in an emailed statement.

U.S. E&PS

Citigroup initiated Diamondback Energy at ‘Buy.’

CANADIAN E&PS

Press Release - MEG Energy announced its 2018 capital investment plan and operational guidance. A 2018 capital budget of $510 million, 24% of which is directed towards the completion of the Phase 2B eMSAGP growth project, 20% towards an expansion of the pilot program involving the company's proprietary eMVAPEX technology and positioning the company to grow beyond 100,000 barrels per day (bpd), 43% towards sustaining and turnaround costs, and the remainder towards field infrastructure, corporate and other initiatives. Financial resources available to the company to fund its 2018 capital program include expected internally generated cash flow and cash on hand. Targeted 2018 average production in the range of 85,000 to 88,000 bpd, 2018 exit production in the range of 95,000 to 100,000 bpd, and non-energy operating costs of $4.75 to $5.25 per barrel. The operational guidance takes into account a major turnaround at the company's Christina Lake Phase 2B processing facilities planned for 2018, with an anticipated 5,000 to 6,000 bpd impact on production for the year.

Press Release - MEG Energy announced the appointment of Daniel S. Farb to its board of directors.

OIL SERVICES

(Late Thursday) Press Release - C&J Energy Services announced that it has completed its acquisition of all of the outstanding equity interests of O-Tex Holdings and its operating subsidiaries, including O-Tex Pumping in a cash and stock transaction. The total consideration paid by C&J consisted of approximately $132.5 million in cash (subject to certain customary post-closing purchase price adjustments) and 4.42 million shares of C&J's common stock. The cash component of the purchase price was funded with cash on hand.

DRILLERS

(Late Thursday) Press Release - Trinidad Drilling announced that it has amended and extended its existing credit facility. Trinidad and its lending group have agreed to extend the maturity of the Company’s existing credit facility by two years, extending the maturity date to December 12, 2020. As part of these negotiations, minor amendments were made to the facility and the size of the credit facility remains unchanged at C$100 million and US$100 million.

MLPs & Pipelines

Press Release - Keyera announced that it has entered into a financing agreement with a syndicate of underwriters co-led by RBC Capital Markets and National Bank Financial Inc. under which Keyera will issue 12,200,000 common shares ("Common Shares") on a "bought deal" basis at an issue price of $35.20 per Common Share for total gross proceeds of approximately $429.4 million.

(Late Thursday) Press Release - Keyera announced that it has entered into 10-year gas handling agreements with Athabasca Oil and Murphy Oil to process natural gas production from their Montney and Duvernay operations west of Fox Creek, Alberta. Both gas handling agreements include take-or-pay commitments and facility dedications.

(Late Thursday) Press Release - Magellan Midstream Partners and Plains All American Pipeline announced that BridgeTex Pipeline, owned 50/50 by Magellan and Plains, plans to further expand the capacity of the BridgeTex pipeline and has launched a supplemental open season to assess customer interest for the expanded capacity. All potential customers must submit binding commitments by 5:00 p.m. Central Time on Dec. 30, 2017.

MARKET COMMENTARY

U.S. stock index futures

were trading lower a day after major indexes set new records, as the Senate postponed voting on the tax bill. Meanwhile,

European shares

declined despite strong euro zone factory data. The

dollar

softened, while

gold

edged up.

November auto sales

data is scheduled for release.

Oil

prices continued to rise a day after OPEC extended output curbs at a meeting in Vienna.


Nasdaq Advisory Services Energy Team is part of Nasdaq's Advisory Services -- the most experienced team in the industry. The team delivers unmatched shareholder analysis, a comprehensive view of trading and investor activity, and insights into how best to manage investor relations outreach efforts. For questions, please contact Tamar Essner
This communication and the content found by following any link herein are being provided to you by Corporate Solutions, a business of Nasdaq, Inc. and certain of its subsidiaries (collectively, “Nasdaq”), for informational purposes only. Nasdaq makes no representation or warranty with respect to this communication or such content and expressly disclaims any implied warranty under law. Sources include Reuters, TR IBES, WSJ, The Financial Times and proprietary Nasdaq research.

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